A Work Project, presented as part of the requirements for the Award of a
Master Degree in Management from the NOVA School of Business and Economics.
ONLINE CONSUMER BEHAVIOR:
A SOCIAL MEDIA PERSPECTIVE HIGHLIGHTING THE CONSUMER ENGAGEMENT WITH THE FASHION INDUSTRY ON INSTAGRAM
ANTONIA SCHNEIDER – 2718
A Project carried out on the Master in Management Program, under the supervision of: Prof. Luis F. Martinez
Abstract
The objective of this study is to investigate the effects on consumer engagement with the fashion industry, resulting from the planned changes in Instagram’s service to businesses, from
offering sole branding opportunities to allowing brand feeds to turn into sales acquisition channels. Through literary– and empirical research tendencies that consumers’ cognition and affect are prone to change on all three engagement levels of the CEBSC model were identified. Key finding of this study is that the industry’s demand for an improved customer journey on the social network, diverges from the overall private user’s demand to rather explore than shop. Nevertheless, very fashion loyal consumers are likely to appreciate a seamless shopping experience. Further research should therefore focus on these specific consumer segments in order to identify their exact behavioral deviation. As a solution to the diverging demand this study suggests that Instagram provides users with the option of opting-out from its shopping service, in order to maintain potential consumers closely in their purchase decision-making process, while not scaring regular Social Media users away.
Keywords: Online Consumer Behavior, Social Media Marketing, Social Media Brand Engagement, Online Brand Cognition, Online Brand Affect
Acknowledgements
Table of Content
Abstract ... 2
Acknowledgements ... 2
1. Introduction ... 4
2. Theoretical Framework ... 5
2.1. Instagram and the Online Fashion Community ... 5
2.2. Consumer Engagement ... 9
3. Methodology ... 11
4. Empirical Results and Research Conclusions ... 14
5. Research Contributions and Limitations ... 21
References ... 23
List of Tables Table 1. Sample Characteristics ... 12
Table 2. Different Interest Groups of Instagram Users (n=154) ... 13
Table 3. Contributive Consumer Engagement on Average ... 16
Table 4. Average Consumer Affect Fostered through Engagement on Instagram ... 17
Table 5. Characteristics of the Fashion Follower Sample Group (n=95)... 18
Table 6. Tendencies of Behavior Changes Expressed by Fashion Followers (n=95) ... 19
1. Introduction
Cognitive and affective consumer engagement receive continuous attention in the field of consumer behavior, consumer decision making and related marketing research (Hollebeek, 2011; Hoyer et al., 2013; Solomon, 2015; Calder et al., 2016). With a growing e-commerce sector and unexplored potentials of the online market, brands open up for new opportunities to engage with their customers online through their personal web shops, as well as through social networking sites (SNS). The main new potential of these networks lies in the interactive and two-sided relationship between a brand and its customers or its respective industry community. Especially large SNS, such as Facebook and Twitter, have been used for marketing purposes in order to engage with potential customers and to turn them into loyal followers (Ashman et al., 2015; Schivinski et al., 2016). These SNS offer instant sales opportunities, as posted content allows direct connections via web-links to the retailers’ web shops, potentially converting into measurable sales (Xiang, 2016).
brands (Erkan, 2015; Dessart et al., 2015). This study uses the Consumer’s Engagement with Brand-Related Social-Media Content (CEBSC) model, in order to observe consumer engagement and to further validate its applicability to Instagram. The three engagement stages of the CEBSC model, consumption, contribution and creation, were contemplated during the conducted empirical research of this report (Schivinski, 2016), while also observing consumers’ cognition and affect (Hollebeek, 2011).
The objective of this study is to investigate the effects on consumers’ engagement with the fashion industry, resulting from the planned changes in Instagram’s design, from offering sole branding opportunities to businesses, into allowing brands’ Instagram profiles to turn into sales acquisition channels. In order to make a comparison, at first stage the effects on consumers’ cognition and affect through engagement with fashion related Instagram content were
highlighted in the context of the CEBSC model. Based on these findings, an evaluation of possible engagement changes in the given scenario was taken. Respective data was then collected via an online survey. The questionnaire was distributed through several SNS to a random sample group. Out of the participants, Instagram users were identified, in order to assure meaningful and relevant data. In terms of industry focus, a broad fashion industry approach has been taken, with no specific attention to any certain brand or segment.
2. Theoretical Framework
2.1.Instagram and the Online Fashion Community
Additionally, it is possible to add a location and subtitle, which also may include hashtags, enabling the reach of a broad anonymous target group. Follower and non-follower have the option to simply visualize the published content or additionally like, comment and/or share it; as long as the user profile is not set to private and therefore limited to a personal user network. However, it is not possible to include web-links in the footnotes of a post, but only in the profile title section (Faßmann and Moss, 2016). Furthermore, it is possible to connect an Instagram profile with other SNS, such as Facebook or Tumblr, permitting an even bigger audience. The usage of the App is considered to be very easy, which largely contributes to the platform’s immense success (Chaykowsky, 2016).
As previously mentioned, Instagram provides its service primarily via mobile App and therefore the growing importance of mobile consumption is likely to have an impact on the users’ behavior (Vorderer et al., 2016). This change in behavior is also visible in the collected data of this report, where 58.4%1 of the respondents transmitted their input via mobile device. Instagram understood the momentum of the mobile age, which companies like Google describe as a fragmentation of attention into micro-moments. These continuously occurring moments create a demand towards brands to respond to consumer needs instantly and in real-time (Google Inc., 2016). Data provided by Instagram to Forbs Magazine in August 2016 states the platform currently has a user base of more than 500 Million people, who are sharing 95 Million uploads per day. On average, these users spend more than 21 minutes in the App on a daily basis, which the company describes as a very sticky user engagement. Further, smartphone users spend one out of every five minutes on their devices using the social networks Facebook and Instagram (Chaykowsky, 2016).
1
Previous research explored the motivation of people to use Instagram and discovered that main reasons are: social interaction, archiving, self-expression, escapism, and peeking (Lee et al., 2015). The intrinsic motives of using Instagram do not specifically include engagement with fashion brands or the fashion industry, but still this kind of interaction happens on a large scale. Vogue Germany (2016) considers Instagram to be the most important branding tool for the fashion industry. The emergence of the internet gave global brands better access to their consumers, leading to a presence of over 50% of the top 100 global brands in online brand communities (Manchada et al., 2012). As fashion is a part of self-expression, which is a key motive for using Instagram (Lee et al., 2015; Sierra, 2015), the visual communication allows brands, models, designers, influencers and fashion magazines to show their community exactly who they are (Vogue Germany, 2016). Members of this community, including regular Instagram users, post their look books, snap shots of outfits, street styles, and comment on, or like the ones of others. The content generated by the mass, inspires the fashion industry and consumers, while it promotes fashion brands and their latest collections and products (Adegeest, 2016). Most of the fashion items displayed on visual SNS can be considered hedonic products and Instagram serves as an aspirational discovery platform for these (Irani and Hanzaee, 2011).
The key of using the full potential of Instagram from a business perspective has so far been by interacting and connecting with users of a certain community, relevant to the company’s brand, as no direct path to commerce had been in place prior. One main objective of brands at first stage has been to either generate a critical mass of followers to their brand’s profile or to create visibility for the brand’s products through influencer marketing (Faßmann and Moss, 2016). As display
mainly to be visually appealing, in order to satisfy the community (Frier, 2016). The research and advisory firm Forrester Inc. discovered in 2014 in a report on user-brand engagement on SNS, that engagement rates per follower were 58 times higher on Instagram than on Facebook and 120 times higher than on Twitter (Elliot, 2014). Other sources support these findings, with less distinctive, but still clear values in favor of the platform’s success (Media Industry Newsletter, 2016). This data has to be observed critically, as criteria to measure engagement are not always clear in the published reports and are often divergent from one study to another.
By launching a new service of shoppable Instagram pictures in October 2016, Instagram responded to the industry’s growing demand to acquire customers directly through the platform.
Previously, third party providers did offer work-around services to facilitate the customer acquisition on the network. Newsletter options such as “like2know.it” have been trying to capture
consumers at the peak of their interest and facilitate their customer journey to purchase (rewardStyle Inc., 2016). In the test phase of its new service, Instagram has chosen to cooperate with 20 US-based retail brands, mainly from the fashion industry. These brands will have the opportunity to display a “tap to view” icon on their posts, allowing consumers to open a tag with
information on up to five displayed products, such as price or product details. By tapping on the tag of the desired product, the consumer will be transferred to a product page on the retailer’s web shop. This direct connection to the sales channel of the brands and retailers will ease the decision making process during the customer journey essentially. Future adjustments of this service may include also an option to save product pages on Instagram as a reminder, in case a user wants to reconsider the purchase options over time (Instagram INC, 2016).
experience to its users; meaning both businesses and individuals (Instagram INC, 2016). James Quarles, Instagram’s vice president for monetization, stated that the company has closely watched other SNS’ challenges with sales acquisition and learned from these, as failure in the industry has
been a common thing (Frier, 2016).
2.2.Consumer Engagement
The framework of consumer engagement lies in the context of attitude formation, consumer decision-making and consequently consumer behavior. Attitude formation can be seen as part of the psychological core of human beings. The process of high-effort attitude formation, taking place when considering the purchase of a hedonic good, is subdivided into cognitive- and affective foundations of attitude. The cognitive foundations of attitude formation consist of an analytical process, structuring the reasoning by analogy and category, influencing the output through direct or imagined experiences and values. An external influence on this process can be the source or medium of the evaluated information (Hoyer et al., 2013). Cognition drives users into drawing their attention towards brands, through the use and absorption of SNS (Dessart et al., 2015). The affective foundation of attitude formation is an emotional process resulting into an enduring
Cognition and affect also play a large role in decision-making processes (Hoyer et al., 2015; Solomon, 2016). Cognitive decision-making can be described as deliberate, rational, and sequential (Solomon, 2016); a process in which items of information about attributes are combined by the consumer in order to form a well evaluated decision (Hoyer et al., 2015). Affective decision-making considers the fact that human beings are never absolutely rational and many times are led by emotions, which cause for example instantaneous reactions (Solomon, 2016).
In the context of decision making it is interesting to observe which of these components may have a higher impact on attitudes. In fact several variations of hierarchies of effect exist. Cognition can be described as the basic engagement in the setting of a standard learning hierarchy, where affect describes a sequential, deeper level of engagement, resulting into a certain behavior. In the scenario described by the experiential hierarchy, the affect causes a certain behavior, which results into cognition. Further, in a low-involvement hierarchy behavior causes an affect, leading into cognition (Solomon, 2015).
In the setting of consumer attitude formation towards brands on Instagram, the engagement can be scaled into three stages, according to the CEBSC model: consumption, contribution and creation. Consumption describes the consumer behavior of observing branded content published on the platform. If the content did catch a user’s attention, contribution may take place by active
interactions such as following, liking, or commenting on branded posts or business profiles. Creation takes place, when users publish their own brand related content (Schivinski et al., 2016). Cognition and affect towards brands and respective products/services can be expressed during all of these three stages. Previous studies mainly took a holistic approach in terms of industries and SNS, when observing consumer engagement (Chen et al., 2015; Dessart et al., 2015; Schivinski et al., 2016). The role of Instagram has been given very little attention in academic research so far, although the platform plays a significant part in today’s social media marketing. In order to observe how user engagement may change, with the introduction of a shoppable Instagram feed, the previously described stages of engagement were ought to be confirmed as existent in the sample of the carried out empirical research.
3. Methodology
of America.2 The total group comprised out of 108 females and 46 males, with 80.5% being aged between 19 and 28 years.
Table 1. Sample Characteristics Data in % with n=154
Age range in years .6% ≤18 26.6%
19-23 53.9% 24-28 10.4% 29-33 8.4% ≥34 Gender
Male 29.9%
Female 70.1%
Other SNS Profiles 97.4%
Facebook 63.6% LinkedIn 59.1% YouTube 48.1% Snapchat 29.2% Pinterest 18.2% Twitter Instagram usage
Opening frequency 12.3%
< daily 13% daily 26% 2-4 times 21.4% 5-7 times 10.4% 8-10 times 16.9% >10 times
Uploads frequency 8.4%
never 28.6% monthly 33.8% 2-3 p.m. 15.6% weekly 11% 2-3 p.w. 2.5% daily
Followers, M (min-max) 411 (2-15,000)
Following , M (min-max) 290 (1-2,500)
Occupation 57.8%
student 35.7% employee 4.5% self-employed 1.9% unemployed
Net Income in € p.m. 25.3% <500 500-1000 34.7% 1001-1500 12% 1501-2000 11.3% 16.7% >2001
Fashion Spending in € p.m. 30.5% <50 50-100 37.7% 101-150 16.2% 151-200 12.3% 3.1% >201
The sample group’s daily interaction with the App is on average 4.99 times per day, with
an average upload of 3.98 pictures/videos per month. These figures reflect to a certain extent the sticky user engagement described by Instagram itself. Displayed in Table 1, the data shows a large standard deviation given that the sample size, with respect to the overall 500 Million active Instagram users (Chaykowsky, 2016), is very small and diverse. The same can also be observed in the sample group’s follower/following numbers. On average the respondents have 411 followers
2
(SD=1372) and follow 292 Instagram profiles (SD=327) themselves. The means’ qualities are not necessarily relevant in order to draw conclusions in this specific case, as the data can still reflect the sample group’s existing cognition and affect towards the fashion industry on Instagram at the
different engagement stages of the CEBSC model and possible changes caused by the introduction of the shoppable Instagram feed (Dessart et al., 2015; Schivinski et al., 2016).
The questionnaire was absolutely anonymous and pointed out that no given answer could be perceived as correct or wrong. Nevertheless, social acceptance mechanisms are likely to have affected the respondents’ reactions to the asked questions (Hawkins and Mothersbaugh, 1998).
Especially, as it is known that reasons to use Instagram are mainly social interaction and self-expression in public display (Lee et al., 2015). This has to be kept in mind when drawing conclusions from research data.
Table 2. Different Interest Groups of Instagram Users (n=154) Grouped by # of respondents and in %
{
Fashion 1 (following Brands/Blogger) #44 (28.6%)Fashion Follower #95 (61.7%) Fashion 2 (following only Brands) #30 (19.5%)
Fashion 3 (following only Blogger) #21 (13.6%)
Non-FashionFollower #59 (38.3%)
factor ANOVA the expected change in engagement behavior of the fashion community was analyzed. As σ of the total sample group is unknown, but n > 100, a normal probability distribution
is expected. (Newbold et al., 2013).
In the survey’s sections, designed to observe the current user engagement with the App and the published content, respondents were asked to indicate their level of agreement with each of the statements using a 5-point Likert scale anchored by "never" and "very often". The section trying to provide an outlook on how consumers are going to react upon the occurring changes in the platform design also used a 5-point Likert scale, anchoring the level of agreement by the statements “very unlikely” and “very likely”(Saunders et al, 2012). The data evaluation aims to provide a behavioral
outlook beyond the observations of the test phase of the new shoppable Instagram feed. It is expected that customer and industry demand for an easy purchasing process through the App differ, as private users’ interest in the platform has no direct relation to commercial intentions.
4. Empirical Results and Research Conclusions
As the objective of this study is to investigate the effects on consumer engagement with the fashion industry resulting from the planned changes in Instagram’s offered business services. Therefore, at first stage the sample’s engagement with the fashion community on Instagram has been observed.
survey data for the existence of this kind of creation engagement is that 61.7% of the respondents stated their friends post fashion related content.
Further, the sample expressed its affect towards the industry mainly during the stages of contribution and creation; when users not only observe content, but also like, comment and share it with their community, or even create their own content in order to publicly display their affect for a certain branded product. Again, based on previous studies, affect could also take place in the form of enjoyment while browsing the Instagram feed of suggested content at the stage of consumption (Dessart et al., 2015; Schivinski et al., 2016). The collected data in combination with the extensively carried out literature research, confirms both cognitive and affective user engagement on the three different engagement stages of the CBESC model. Further, the users’ engagement is observed at each of the levels separately and in detail.
Consumption. The survey data regarding the users’ opening frequency, listed in Table 1, visualizes the repetitive user engagement with the App at the consumption level, allowing an active mental state for cognitively processing branded content displayed by the fashion community, while out of affect repeating this action several times throughout a day.
Contribution. The fact that users have to opt-in on interaction with the fashion community,
by following brands or fashion influencers, visualizes the cognitive element of engaging with the industry through the App on a contributive level. The users’ attention to brands and their respective products has to be given voluntarily, creating a favorable mindset of the user.Reaching a cognitive point of absorption contributes to successful brand profiles, as exposure to a brand’s fashion items
industry is nevertheless low, as on average Fashion Follower express to like or comment on content rarely. The fairly high standard deviation expresses that bonds to the industry are of varying intensity, such as overall social bonds in the Non-Fashion group.
Table 3. Contributive Consumer Engagement on Average Scale: (1) never, (2) rarely, (3) sometimes, (4) often, (5) very often
Fashion Non-Fashion
I like or comment on pictures of my friends:
M=4.2 SD=.9 M =3.5 SD =1.4
I like or comment on pictures of famous people:
M =2.2 SD =1.2 M =1.6 SD =1.0
I like or comment on pictures posted by fashion
bloggers: M =2.2 SD =1.5 M =1.1 SD =0.2
I like or comment on pictures posted by fashion brands:
M =2.0 SD =1.3 M =1.1 SD =1.1
Table 4. Average Consumer Affect Fostered through Engagement on Instagram Scale: (1) never, (2) rarely, (3) sometimes, (4) often, (5) very often
Fashion Non-Fashion
I enjoy to interact with my friends on Instagram: M=3.7 SD=1.2 M=3.3 SD=1.3
I enjoy to interact with the fashion community on
Instagram: M=2.3 SD=1.5 M=1.1 SD=0.1
I feel happy when I receive likes on Instagram: M=4.0 SD=1.1 M=3.8 SD=1.3
I get excited about receiving a response on my posts
from the fashion community on Instagram: M=2.8 SD=2.3 M=1.7 SD=1.5
Creation. The most effort involving engagement stage of creation has only been observed
on a superficial level, by asking the respondents if their personal network published fashion related content. As content generation has no clear pattern, insights to this stage need to be explored through qualitative research. The fact that some respondents stated to get excited about receiving responses by the fashion community to their fashion related publications, gives a hint on their participation at this stage. The large standard deviation further may be another indicator that not all Fashion Follower engage at the highest level of the CBESC model on Instagram in the fashion context.
Instagram’s high user engagement, from consumption over contribution to creation, shows the platform’s great potential to tie tight bonds with the fashion community. Both standard learning
shoppable Instagram profiles carries, besides a great opportunity, also a large risk to lose consumer engagement and therefore brand visibility. The possible impact on consumer engagement was empirically assessed, by observing the preferences of the three subcategories of the Fashion Follower group, defined in Table 2.
Table 5 shows further indications that the respondent group Fashion 1 has the highest interest in the fashion industry. As all responses show a standard deviation >1, it still cannot be concluded that group Fashion 2 and 3 do not hold loyal fashion consumers. In the fashion context the overall reason why consumers turn to Instagram in a fashion context is to get inspired. Making actual purchases of clothes seen on the feed only happens in an irregular frequency. Group Fashion 1 was the only group to state that they sometimes have the desire to make a purchase of an exact good discovered on the platform.
Table 5. Characteristics of the Fashion Follower Sample Group (n=95) Scale: (1) never, (2) rarely, (3) sometimes, (4) often, (5) very often
Fashion 1 Fashion 2 Fashion 3
I take Instagram as a source of style
inspiration: M=3.9 SD=1.2 M=3.0 SD=1.6 M=3.3 SD=1.9
I buy clothes that look similar to the
ones I saw posted by friends: M=2.6 SD=1.2 M=2.2 SD=1.1 M=2.3 SD=1.2
I buy clothes that look similar to the
ones I saw posted by bloggers: M=3.2 SD=1.6 M=2.2 SD=1.5 M=2.8 SD=1.6
I buy clothes that look similar to the
ones I saw posted by fashion brands: M=3.2 SD=1.2 M=2.5 SD=1.4 M=2.2 SD=1.4
I search for the new fashion
collection of a brand on Instagram: M=2.7 SD=1.8 M=1.8 SD=1.0 M=1.6 SD=1.1
I have the desire to purchase the exact products I saw on Instagram posts:
M =3.1 SD=1.5 M=2.0 SD=1.2 M=2.3 SD=1.6
looking at the entire Fashion Follower group, 37% expressed that it is somewhat likely or likely they might even stop following fashion brand or influencer profiles, if the aforementioned tried to make direct sales through Instagram. This kind of threat should not be underestimated by the industry and also not by Instagram, in order to turn the business service into a successful way to monetize the App.
Table 6. Tendencies of Behavior Changes Expressed by Fashion Followers (n=95) Scale: (1) very unlikely, (2) unlikely, (3) indifferent, (4) somewhat likely, (5) very likely
Fashion 1 Fashion 2 Fashion 3 Non-Fashion
How likely is it that you would follow more fashion brands if you could directly purchase clothes through
Instagram?
M=3.2 SD=1.5 M=2.7 SD=1.5 M=2.6 SD=2.2 / /
How likely is it that you would still engage with brands if they tried to sell directly through
Instagram?
M=3.0 SD=1.7 M=2.6 SD=1.1 M=2.8 SD=1.7 / /
How likely is it that you would follow fashion bloggers who tried to link directly to brands' web shops?
M=2.9 SD=1.5 M=2.4 SD=1.3 M=2.6 SD=1.1 / /
How likely is it that you search for clothes on Instagram with the intention to make a purchase?
M=2.6 SD=1.9 M=2.3 SD=1.7 M=2.6 SD=2.0 / /
How likely is it that you stop following fashion related brand or influencer profiles?
M=2.4 SD=1.6 M=3.0 SD=1.4 M=2.7 SD=1.6 / /
How likely is it that you stop using Instagram if brands use it as a sales acquisition channel?
M=2.5 SD=1.6 M=2.5 SD=1.4 M=2.4 SD=2.1 M=2.2 SD=1.7
Further, since r >.5 can be considered a large positive correlation, the actions of having previously purchased fashion items that were similar to the ones seen on Instagram seem to create a desire of wanting to make direct purchases through the App.
Table 7. Correlations of Engagement and Purchase Behavior3
Fashion Follower (n=95)
I contribute on fashion blogger content I contribute on fashion brand content
I buy items displayed by
fashion bloggers
I buy items displayed by
fashion brands
I wish I could buy products
directly through Instagram I contribute on
fashion blogger content
1
I contribute on fashion brand content
.6483 1
I buy items displayed by fashion bloggers
.3974 .1853 1
I buy items displayed by fashion brands
.2489 .2588 .7802 1
I wish I could buy products directly through Instagram
.3407 .3407 .5632 .5696 1
Therefore, the introduction of the test phase of a seamless shopping experience on Instagram does not only respond to the demand of the industry, but also to the demand of some Fashion Follower who have displayed previous interest in purchasing goods visualized on their Instagram feed. The survey data therefore expressed that attempts to directly close the customer journey on Instagram withholds a great opportunity to monetize Instagram’s services to businesses
in a more successful and measurable way. The strategy on how to introduce this shopping experience should nevertheless be planned cautiously, as users’ engagement with the industry may decrease, displayed by data in Table 6. A way to avoid scaring away or discouraging community
3
members could be achieved by designing the “tap to view” icon in a non-dominant way, so it is not too prominent in a user’s feed and does not create the impression of trying to push the viewer into
making a purchase. Another option for Instagram to avoid consumer reluctance could be to offer the users the option of opting-out of the shoppable visualization of brand profiles. Like this, consumers have the power to consciously decide for themselves, if they want to experience an easier customer life cycle on Instagram. After all, users’ main reason to use the App is to interact with their private network, as the data of Table 3 and 4 revealed.
5. Research Contributions and Limitations
Academic contributions. This study contributes mainly theoretically to the academic
research within the field of online consumer behavior, highlighting the consumer engagement with fashion brand related content on Instagram on the cognition and affect towards the industry. Further, it adds empirical insights on the validity of the CEBSC scale for Instagram. Last, it provides an outlook on how the currently tested business service changes are going to impact the consumer engagement with the fashion community through Instagram. With this two-sided approach, this research synthesizes extant academic research on consumer behavior in the social media context and adds empirical data, closing gaps to previous studies.
Managerial Implications. Social Media Marketing has and will continue to develop to be
Limitations. Both academic and managerial contributions can set the basis for future
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